PNC Bank 2009 Annual Report Download - page 7

Additional information regarding our acquisition of National
City can be found in Item 7 and Item 8 of this Report.
R EPURCHASE O F O UTSTANDING TARP P REFERRED S TOCK
See Note 19 Equity in the Notes To Consolidated Financial
Statements in Item 8 of this Report regarding our
December 31, 2008, issuance of $7.6 billion of Fixed Rate
Cumulative Perpetual Preferred Shares, Series N (Series N
Preferred Stock), and the related warrant to the US Treasury
under the US Treasury’s Troubled Asset Relief Program
(TARP) Capital Purchase Program.
As approved by the Federal Reserve Board, the US Treasury
and our other banking regulators, on February 10, 2010, we
redeemed all 75,792 shares of our Series N Preferred Stock
totaling $7.6 billion held by the US Treasury. We used the net
proceeds from our February 2010 common stock and senior
notes offerings and other funds to redeem the Series N
Preferred Stock. We did not exercise our right to seek to
repurchase the related warrant at the time we redeemed the
Series N Preferred Stock.
Note 28 Subsequent Events in Item 8 of this Report has
additional information regarding the redemption of the Series
N Preferred Stock and the February 2010 common stock and
senior notes offerings.
P ENDING S ALE O F PNC G LOBAL I NVESTMENT S ERVICING
On February 2, 2010, we entered into a definitive agreement
to sell PNC Global Investment Servicing Inc. (GIS), a leading
provider of processing, technology and business intelligence
services to asset managers, broker-dealers and financial
advisors worldwide, for $2.3 billion in cash. Upon completion
of the sale, we expect to report an after-tax gain of
approximately $455 million.
We currently anticipate closing the transaction in the third
quarter of 2010. Completion of the transaction is subject to
regulatory approvals and certain other closing conditions. If
the sale of GIS has not been completed by November 1, 2010,
we will be required, on or before that date, to raise $700
million in additional Tier 1 common capital. We would do this
either through the sale of assets approved by the Federal
Reserve Board and/or through the issuance of additional
common stock. See Item 1A Risk Factors for further
information.
In addition to National City and GIS, we include information
on other significant acquisitions and divestitures in Note 2
Acquisitions and Divestitures in Item 8 of this Report and here
by reference.
R EVIEW O F L INES O F B USINESS In the first quarter of 2009,
we made changes to our business organization structure and
management reporting in conjunction with the National City
acquisition. In addition to the following information relating
to our lines of business, we incorporate information under the
captions Line of Business Highlights, Product Revenue, and
Business Segments Review in Item 7 of this Report here by
reference. Also, we include financial and other information by
business in Note 27 Segment Reporting in the Notes To
Consolidated Financial Statements in Item 8 of this Report
here by reference.
Assets, revenue and earnings attributable to foreign activities
were not material in the periods presented. Business segment
results for periods prior to 2009 have been reclassified to
reflect current methodologies and current business and
management structure and to present those periods on the
same basis but do not include the impact of National City,
which we acquired on December 31, 2008. As a result of its
pending sale, GIS is no longer a reportable business segment.
Retail Banking provides deposit, lending, brokerage, trust,
investment management, and cash management services to
consumer and small business customers within our primary
geographic markets. Our customers are serviced through our
branch network, call centers and the internet. The branch
network is located primarily in Pennsylvania, Ohio, New
Jersey, Michigan, Maryland, Illinois, Indiana, Kentucky,
Florida, Missouri, Virginia, Delaware, Washington, DC and
Wisconsin.
Our core strategy is to acquire and retain customers who
maintain their primary checking and transaction relationships
with PNC. We also seek revenue growth by deepening our
share of our customers’ financial assets, including savings and
liquidity deposits, loans and investable assets. A key element
of our strategy is to expand the use of alternative distribution
channels while continuing to optimize the traditional branch
network. In addition, we have a disciplined process to
continually improve the engagement of both our employees
and customers, which is a strong indicator for customer
growth, retention and relationship expansion.
Corporate & Institutional Banking provides lending, treasury
management, and capital markets-related products and
services to mid-sized corporations, government and
not-for-profit entities, and selectively to large corporations.
Lending products include secured and unsecured loans, letters
of credit and equipment leases. Treasury management services
include cash and investment management, receivables
management, disbursement services, funds transfer services,
information reporting, and global trade services. Capital
markets-related products and services include foreign
exchange, derivatives, loan syndications, mergers and
acquisitions advisory and related services to middle-market
companies, securities underwriting, and securities sales and
trading. Corporate & Institutional Banking also provides
commercial loan servicing, and real estate advisory and
technology solutions for the commercial real estate finance
industry. Corporate & Institutional Banking provides products
and services generally within our primary geographic markets
with certain products and services offered nationally.
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